Online Access Free F1 Exam Questions

On 31 March 20X1 OP decided to sell a property. On that date this property was correctly classified as held for sale in accordance with IFRS 5 Non-Current Assets Held For Sale And Discontinued Operations.
In the draft financial statements of OP for the year ended 31 October 20X1 this property has been included at its fair value, which was $520,000 lower than its carrying value. This has resulted in a charge to profit or loss, the result of which is that the draft financial statements show a loss of $450,000 for the year to 31 October
20X1. When the management board of OP reviewed the draft financial statements it was unhappy about the loss and decided that the property should be reclassified as a non-current asset and reinstated to its original value, despite the fact that its plans for the property had not changed.
In accordance with the ethical principle of professional competence and due care, which THREE of the following statements explain how this property should be accounted for in the financial statements of OP for the year ended 31 October 20X1?

• A.The property impairment should not be recorded until the sale has completed.
• B.The property should not be depreciated after 31 March 20X1.
• C.The property should be treated as a non-current asset held for sale from 1 November 20X1.
• D.The impairment of $520,000 should be shown as an expense in the statement of profit or loss.
• E.The property should be depreciated until 31 October 20X1.
• F.The property should be treated as a non-current asset held for sale from 31 March 20X1.

When calculating the gam chargeable to tax on the disposal of a building, which of the following would NOT be an allowable deduction?

• A.Legal fees arising on the original purchase of the building.
• B.Costs of constructing an extension to the building.
• C.Interest on a loan that was used to assist with its original purchase.
• D.Estate agent's fee payable on its sale.

MNO is a manufacturer. Which TWO of the following costs will MNO add to the cost of its finished goods inventory in accordance with IAS 2: Inventories?

• A.Selling and distribution
• B.Import duties
• C.Warehouse rent
• D.Abnormal material waste
• E.Direct labour

There are two main approaches to corporate governance: rules-based and principle-based.
Which THREE of the following are correct?

• A.Rules-based corporate governance applies to the UK and principle-based corporate governance applies to the USA.
• B.Sarbanes Oxley Act (SOX) is a principle-based approach to corporate governance.
• C.Best practice will use a rules-based approach to corporate governance and will have appropriate penalties for transgression.
• D.A principle-based approach will mean the entity must comply or explain and a rules-based approach will have appropriate penalties for transgression.
• E.Rules-based corporate governance applies to the USA and principle-based corporate governance applies to the UK.
• F.Sarbanes Oxley Act (SOX) is a rules-based approach to corporate governance.

EF has been offering its customers a 60 day credit period, but now wants to improve its cash flow.
EF is proposing to offer a 2% discount for payment in 15 days.
Assume a 365 day year and an invoice value of $100.
Which of the following is the effective annual interest rate EF will incur for this action?

• A.13.1%
• B.17.8%
• C.63.4%
• D.35.4%